1 28 Feb 2013 2012 Annual Results Group Highlights 2012 2011 - PowerPoint PPT Presentation

1 28 Feb 2013

2012 Annual Results – Group Highlights 2012 2011 Operating Cash Flow Operating Cash Flow US$149m US$159m US$m 159 149 Underlying Profit US$48m US$58m Net (Loss) / Profit US$(158)m US$32m 2012 2011 Cash Position US$753m US$618m Underlying Profit Earnings per Share HK¢(64) HK¢13 US$m HK¢21 on continuing 58 48 operations Dividend per Share HK¢5 (proposed) HK¢10  Group results were impacted by: 2012 2011  a US$199m write-off for our RoRo investment  very weak dry bulk spot market Net Profit US$m  a strong US$38m contribution from PB Towage 32 -158  Balance sheet retains substantial buying power:  US$753m total cash and deposits  Low 14% group net gearing  Fully funded capital commitments of US$236m relating to 16 dry bulk vessels 2012 2011  8 dry bulk ships acquired since September 2012 2 2012 Annual Results

Pacific Basin Dry Bulk – 2012 performance Handysize 2012  Handysize daily rate: US$10,460 (-23% YOY)  PB outperformed spot market by 44% Dry Bulk net profit US$39.3m  Respectable performance reflects value of our industrial and  Handysize contribution US$62.0m  customer-focused business model Handymax contribution US$6.7m  Direct overheads US$(35.3m) Handymax Operating cash flow US$114.1m  Handymax daily rate: US$11,720 (-22% YOY)  PB Outperformed spot market by 31% Return on net assets 5%  Our reliance on relatively expensive medium-term chartered ships in the depressed market resulted in a modest albeit positive Handymax contribution overall Post-Panamax  2 Post-Panamax ships continue to operate satisfactorily under long-term charters Further investment in dry bulk  Since September 2012, we have acquired for US$122m:  6 secondhand Handysize ships  1 secondhand Handymax ship  1 Handysize newbuilding resale 3 2012 Annual Results

Pacific Basin Dry Bulk - Earnings Coverage Handysize Handymax As at 25 February 2013 41,000 Fixed days 14,610  Our dry bulk business Unfixed days model facilitates a 29,760 valuable cargo book Days 1  Enables us to 8,740 Days 1 outperform the market (by 44% in 2012) 100% 55% 100% 80% US$10,460 US$9,340 US$10,620 US$11,720 2012 2013 2012 2013 Pacific Basin Dry Bulk Fleet: 189 (on the water: 172 3,4 ) average age of our core fleet: 6.2 years old Owned Chartered Total As at 2011 AR On the water Newbuilding On the water Newbuilding 25 Feb 2013 Handysize 38 3 84 2 122 7 4 133 5 4 Handymax 5 43 1 54 45 Post- 1 0 1 0 2 2 Panamax Total 169 44 12 128 5 189 1 2013 cover excludes 7,970 (Handysize) & 1,270 (Handymax) revenue days chartered in on index-linked basis 2 Includes 13 finance lease vessels 3 Includes 3 Handysize secondhand acquisitions not yet delivered 4 2012 Annual Results 4 Includes 1 Handymax secondhand acquisition not yet delivered

Dry Bulk Market Information  Excessive newbuilding deliveries in 2012 impacted freight rates across all dry bulk segments  Lowest annual average BDI since 1987  Average Handysize and Handymax daily market spot rates fell 28% YOY - still equalled or exceeded average rates for larger vessels  Protracted market weakness further impacted ship values  5 year old Handysize value: US$17m (down 13% from a year ago)  Newbuilding prices also reduced to pre-boom levels: US$21m Baltic Dry Index (BDI) versus Handysize Vessel Values Baltic Handysize Index (BHSI) & Baltic Capesize Index (BCI) US$ Million BDI US$/day net 60 3,000 $35,000 50 $30,000 2,500 Feb 13: 40 $25,000 Newbuildng 2,000 (35,000 dwt): 30 US$21m 26 Feb 2013: 1,500 $15,000 20 BDI: 741 1,000 5 years $10,000 10 (32,000 dwt): BHSI: US$5,923 500 US$17m 0 BCI: US$4,488 0 $0 03 04 05 06 07 08 09 10 11 12 13 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 5 Source: The Baltic Exchange, Clarksons 2012 Annual Results

Dry Bulk Demand Dry Bulk Effective Demand 2012 Chinese Minor Bulk Imports m tonnes % change YOY Chinese Imports 25 increased 7% in 2012 14 20 12 10.0 10 9.0 7.2 8 15 6 4.1 3.1 2012 4 10 2011 2 2010 0 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -2 2008 2009 2010 2011 2012E 1QE 2QE 3QE 4QE China imports of a basket of 7 important minor bulks : logs, soyabean, fertiliser, bauxite, nickel, copper concentrates and manganese ore – representing 1/3 of Pacific Basin’s 2012 cargo volumes International cargo  Overall dry bulk demand increased 7% volumes Congestion effect  Demand growth influenced by: Tonne-mile effect  Expanded volumes on high-volume major bulk trade routes China coastal cargo, off-hire  Chinese imports of seven important minor bulks increased 7% - lending strong & ballast effect support to global demand for smaller ships Net demand growth  Logs trade was impacted by a slowdown in Chinese property sector Source: R.S. Platou, Bloomberg 6 2012 Annual Results

Global Dry Bulk Fleet Development Handysize Age Profile (25,000-39,999 dwt)  2012 net fleet growth: Handysize Dry Bulk overall 2,115 vessels (68.1m dwt) YOY 10% 3% 30+ years  Driven by 98m tonnes of new capacity (deliveries 7% slowed in 4Q) 25 - 29 years 15%  Heavy influx of newbuildings was only partially offset by record-high scrapping of 33.6m tonnes 16 - 24 years 0 - 15 years 11% 67%  22% of Handysize fleet is over 25 years old Dry Bulk Scrapping versus BDI Global Dry Bulk Fleet Development Million Dwt Million Dwt BDI 2009 2010 2011 2012 Yard Deliveries 0 3,000 120 Conversions 20% 3.6 6.4 5.3 Scrapping 100 5 2,500 16% Net Fleet Growth YOY 19.6 80 14.7% 27.2 10 12% 2,000 60 10.3% 98.5 15 40 8% 1,500 97.8 20 20 4% 1,000 23.2 0 25 Total dry bulk scrapping - 23.2 0% - 33.6 -20 500 30 Handysize scrapping (25,000-39,999Dwt) -40 -4% BDI 33.6 2008 2009 2010 2011 2012 35 0 7 2012 Annual Results Source: Clarksons, Bloomberg, as at 1 Feb 2013

Dry Bulk Orderbook Handysize Orderbook 341 vessels (12m dwt) Jan13 Orderbook m Dwt 14  Ship owners ordered 55% less new capacity YOY due to 28% 12 weak market conditions Shortfall 10  101m dwt of new capacity scheduled to deliver in 2013 1.1% 8 11.5%  2012 Newbuilding deliveries of 98m dwt were 30% below the 6 scheduled orderbook at the start of the year – expect approx. 4 4.4% 25%-30% slippage in FY2013 1.4% 2 0 2012 Orderbook Average Over Scheduled Actual 2013 2014 2015+ Scrapping as as % of Age 25 orderbook delivery % of fleet on Existing Years 2012 1Jan13 Fleet Total Dry Bulk Orderbook 19% 10 6% 5% Total Dry Bulk >10,000 dwt 1,657 vessels (131m dwt) m Dwt Handysize 17% 11 22% 9% 140 30% (25,000-39,999 dwt) Shortfall 120 Handymax 139m 18% 9 9% 6% 100 1.4% (40,000-64,999 dwt) 13.5% 80 Panamax 98m 26% 8 3% 3% 60 (65,000-119,999 dwt) 4.8% 40 Capesize 17% 8 2% 5% 20 (120,000+ dwt) 0.7% 0 Scheduled orderbook Actual delivery 2013 2014 2015+ 8 Source: Clarksons, as at 1 Feb 2013 2012 Annual Results 2012

Pacific Basin Dry Bulk - Outlook  Strong Chinese demand for minor bulk  Still excessive, but reduced, overhang of supply commodities + shipbuilding capacity  Global trade imbalances and fleet utilisation  Global economic recovery negatively impacted inefficiencies by further shocks relating to European finances and US government spending  Stronger than anticipated US economic recovery and revived industrialisation in N. America  Premature shipowner optimism resulting in less scrapping, increased ordering activity and  Fewer newbuilding deliveries increased vessel prices  Continued high levels of dry bulk scrapping  Increased national protectionism impacting raw  Bank lending constraints limit funding for ship materials trade acquisitions  Potentially weaker growth in the Chinese economy and industrial production PB Outlook:  Dry bulk market to remain weak overall in 2013 though healthier fundamentals should limit further downside in Handysize  Dry cargo demand is likely to be similarly healthy as last year  Supply-side fundamentals are improving, but will take time to absorb oversupply  Challenging market conditions likely to generate further acquisition opportunities Strategy:  Invest in high-quality Handysize and Handymax ships  Expand our dry bulk customer and cargo portfolio  Decentralise our operational support function 9 2012 Annual Results

PB Towage 2012 Performance 2012  Continued strong demand for marine logistics from oil & gas projects Towage net profit US$37.7m  Good growth in harbour towage sector Operating cash flow US$52.1m  PB Towage results have continued to strengthen due to: Return on net assets 17%  Improved market conditions  Our increased market presence and penetration PB Towage Fleet: 44 vessels Offshore Towage (as at 25 Feb 2013)  Western Australia and Queensland oil & gas developments continued to drive demand for offshore marine logistics  North West Shelf LNG construction projects have progressed further  Some increase in demand in Middle East market, but remains difficult due to excessive supply Harbour Towage  Supported by 11% increase in volumes and higher market share in the main liner and bulk ports 35 Tugs (31 Owned + 4 Chartered) 7 Barges (6 Owned + 1 Chartered) Supply 1 owned bunker tanker and 1  Barrier to entry for new entrants in Australian domestic market chartered passenger/supply vessel 10 2012 Annual Results